Predictive vs. Diagnostic Investing

Jordan Kimmel |

Jordan Kimmel EquitiesIf you are around Wall Street you will hear all kinds of predictions...the economy will do this or that, a bio-tech will get an approval, a takeover is eminent…

Some of these come to fruition, most don’t. One of the most empowering realizations I had years ago was that nobody knows the future. Rather than frustrate me, this understanding helps me to operate under a probabilistic methodology. Aaron Brown from AQR helped me to understand this too.

The Poker Face of Wall St. by Brown talks about the need to use odds in your favor, use money management, and to relax and go with the flow. IBD talks about market, sector, stock. How does this all work together?

The diagnostics of the market is about the internals: take an MRI of the market rather than guess what will happen…the A/D line, the number of new highs and lows, the sectors leading and lagging…once you have this part right- it is time to use your watch list- for longs and shorts…

We are currently operating within a Bull Market. We see which sectors are leading. Don’t over complicate your thinking. It should be nothing different the driving your car and adapting to the road conditions. Take it one day and one mile at a time- you can watch the weather reports- but take a look out the window yourself and take all predictions with a grain of salt.

*DISCLOSURE: No relevant positions

This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by T3 LIVE or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs. Visit the T3Live Homepage, Virtual Trading Floor, and Learn More About Us.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
NCQ NovaCopper Inc. n/a n/a n/a n/a

Comments

Emerging Growth

CohBar Inc.

CohBar Inc is a research stage biotechnology company. The Company conducts investigational research into Mitochondrial-Derived Peptides to evaluate their therapeutic potential through in vitro and in vivo models.

Private Markets

XY Find It

Founded by serial entrepreneur Arie Trouw, XY Findables follows a single guiding principle: customers should never lose anything important again. With over 50,000 users around the world, more than 100,000…

Lyft

Lyft matches drivers using their own personal vehicles with passengers who request rides through the smartphone app, and the passengers pay automatically through the app. When using Lyft, passengers have…